Trustmark (TRMK) 8-K Trustmark Announces Third Quarter Financial Results

Exhibit 99.1   

[Missing Graphic Reference]News Release

Trustmark Announces Third Quarter Financial Results

Jackson, Miss. - October 18, 2005 - Trustmark Corporation (NASDAQ:TRMK) announced net income of $26.2 million in the third quarter of 2005, which represented basic and diluted earnings per share of $0.46. Highlights of the quarter included:

·   Impact of Hurricane Katrina reduced net income by $8.6 million, or $0.153 per share

·   Total loans increased $612.1 million, or 11.36%, compared to figures one year earlier

·   Total deposits expanded $557.9 million, or 10.55%, compared to figures one year earlier

·   Quarterly dividend increased 5% to $0.21 per share

In the aftermath of Hurricane Katrina, which struck the Gulf Coast region and continued inland throughout the southern and eastern parts of Mississippi on August 29, Trustmark initiated a process to assess the storm’s impact on the company and its customers. While no Trustmark facilities sustained significant damage, a number of the company’s offices were temporarily closed until utility services were restored. Trustmark identified customers impacted by the storm in an effort to estimate the loss of collateral value and customer payment abilities. As a result of customer surveys, collateral inspections and a review of risk characteristics, management increased its allowance for loan losses due to the storm by $9.8 million, which reduced third quarter net income by $6.1 million, or $0.107 per share.

Trustmark also recorded mortgage related charges, including adjusted fair values on residential mortgage loans held for sale, mortgage servicing rights impairment for increases in prepayment speeds on mortgage loans and waived fees in the affected area, which collectively reduced third quarter net income by $1.4 million, or $0.025 per share. Lower non-interest revenue as a result of waived retail account charges and hurricane relief efforts also reduced Trustmark’s third quarter net income by $839 thousand ($0.015 per share) and $333 thousand ($0.006 per share), respectively.

Trustmark’s performance for the quarter ended September 30, 2005 resulted in a return on average assets of 1.27% and a return on average shareholders’ equity of 13.81%. Basic and diluted earnings per share for the nine months ended September 30, 2005 were $1.32. Trustmark’s performance during the first nine months of 2005 resulted in a return on average assets of 1.23% and a return on average shareholders’ equity of 13.36%. At September 30, 2005, Trustmark reported total loans of $6.0 billion, total deposits of $5.8 billion and shareholders’ equity of $732.6 million.

Richard G. Hickson, Chairman and CEO, stated, “While Hurricane Katrina left unprecedented destruction in its wake, Mississippians have responded with courage and a solid commitment to rebuild and improve our hard-hit communities. We have reached out to our customers to provide personalized financial advice and have responded according to their needs. In an effort to provide additional assistance to our residential mortgage and consumer lending customers on the Gulf Coast, Trustmark established a temporary office in Gulfport and a temporary mobile office to serve the Gulfport-Biloxi and Pascagoula MSAs.

“Despite the disruption caused by the storm, we are pleased with the continued growth in our loan portfolio. During the twelve month period ended September 30, 2005, Trustmark’s loans increased $612.1 million, or 11.36%. Our growth during the period was well diversified geographically as well as by loan type. Credit quality remains strong; nonperforming assets were $29.8 million at September 30, 2005, and the allowance coverage for nonperforming loans was 279%. Net charge offs represented 0.15% of average loans in the third quarter.

“Total deposits increased $557.9 million, or 10.55%, when compared to figures one year earlier. We have continued to focus upon increasing core deposit relationships under attractive terms and are pleased with the diversified growth provided by our four-state banking franchise,” said Hickson.

“While loan and deposit generation in our traditional banking business has been brisk, we have also experienced growth in our insurance and wealth management businesses. Insurance revenues in the third quarter of 2005 increased 78.8% when compared to figures one year earlier. This increase is primarily due to our acquisition of Fisher-Brown, Inc., northwest Florida’s leading insurance agency. Revenue from our wealth management business expanded 4.2% relative to the comparable period in 2004.

“The fundamental strengths of Trustmark’s key businesses remain strong. We will continue our efforts to grow and diversify our revenue stream and diligently manage expenses,” said Hickson.

During the third quarter, higher interest rates increased the value of Trustmark’s home mortgage servicing rights. As a result, Trustmark reversed non-cash mortgage servicing impairment charges recorded in previous quarters, which increased the company’s third quarter net income by $2.3 million, or $0.04 per share. Additional non-cash recoveries of mortgage servicing impairment could occur if interest rates rise, refinancing slows and the expected life of home mortgage loans lengthens.

Trustmark evaluated its strategic alternatives in payment processing systems and selected NOVA Information Systems as its provider of card processing services for its commercial customers. Through this alliance, Trustmark continues to provide its customers state-of-the-art product offerings. As part of this agreement, Trustmark sold its existing payment processing portfolio to NOVA during the third quarter for a gain of $5.75 million, which increased net income by $3.55 million, or $0.063 per share.

The Board of Directors of Trustmark Corporation announced a 5% increase in its regular quarterly dividend to $0.21 from $0.20 per share. The Board declared the dividend payable on December 15 to shareholders of record as of December 1, 2005. This action raises the indicated annual dividend rate to $0.84 per share from $0.80 per share.

“This marks the 23^rd consecutive increase in Trustmark Corporation’s annual dividend and reflects the continuing financial strength of Trustmark,” said Hickson.

The Board of Directors authorized the repurchase of up to an additional 5%, or approximately 2.8 million shares, of the Corporation’s common stock. When combined with its previously existing share repurchase program, Trustmark now has authorization to repurchase up to an additional 3.8 million of its shares. During the first nine months of 2005, Trustmark repurchased approximately 2.0 million shares of its common stock, including 838 thousand in the third quarter. The repurchase program is subject to market conditions and management discretion and will continue to be implemented through open market purchases or privately negotiated transactions.

Trustmark is a financial services company providing banking and financial solutions through over 145 offices and 2,600 associates in Florida, Mississippi, Tennessee and Texas. For additional information, visit our web site at www.trustmark.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this earnings release are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.

These risks could cause actual results to differ materially from current expectations of Management and include, but are not limited to, changes in the level of nonperforming assets and charge offs, local, state and national economic and market conditions, material changes in market interest rates, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, changes in existing regulations or the adoption of new regulations, acts of war or terrorism, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of Trustmark’s borrowers, the ability to control expenses, changes in Trustmark’s compensation and benefit plans, greater than expected costs or difficulties related to the integration of new products and lines of business and other risks described in Trustmark’s filings with the Securities and Exchange Commission.

Although Management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Trustmark undertakes no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.

Trustmark Contacts

Investors:	Zach Wasson Executive Vice President and CFO 601-208-6816	Joseph Rein First Vice President 601-208-6898
Media:	Gray Wiggers Senior Vice President 601-208-5942

TRUSTMARK  CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2005
($ in thousands)
(unaudited)
	Quarter Ended September 30,
AVERAGE BALANCES		2005			2004			$ Change		% Change
Securities AFS-taxable	$	1,133,718		$	1,901,589		$	(767,871	)	-40.4	%
Securities AFS-nontaxable		60,075			69,501			(9,426	)	-13.6	%
Securities HTM-taxable		208,221			65,565			142,656		217.6	%
Securities HTM-nontaxable		94,811			87,454			7,357		8.4	%
Total securities		1,496,825			2,124,109			(627,284	)	-29.5	%
Loans		5,914,589			5,386,084			528,505		9.8	%
Fed funds sold and rev repos		31,152			30,574			578		1.9	%
Total earning assets		7,442,566			7,540,767			(98,201	)	-1.3	%
Allowance for loan losses		(66,120	)		(74,228	)		8,108		-10.9	%
Cash and due from banks		313,434			334,298			(20,864	)	-6.2	%
Other assets		527,897			488,363			39,534		8.1	%
Total assets	$	8,217,777		$	8,289,200		$	(71,423	)	-0.9	%
Interest-bearing demand deposits	$	829,106		$	1,288,849		$	(459,743	)	-35.7	%
Savings deposits		1,488,974			942,139			546,835		58.0	%
Time deposits less than $100,000		1,323,998			1,319,206			4,792		0.4	%
Time deposits of $100,000 or more		674,440			456,500			217,940		47.7	%
Total interest-bearing deposits		4,316,518			4,006,694			309,824		7.7	%
Fed funds purchased and repos		637,923			966,420			(328,497	)	-34.0	%
Short-term borrowings		959,605			862,529			97,076		11.3	%
Long-term FHLB advances		205,812			378,990			(173,178	)	-45.7	%
Total interest-bearing liabilities		6,119,858			6,214,633			(94,775	)	-1.5	%
Noninterest-bearing deposits		1,245,573			1,262,756			(17,183	)	-1.4	%
Other liabilities		99,102			79,427			19,675		24.8	%
Shareholders' equity		753,244			732,384			20,860		2.8	%
Total liabilities and equity	$	8,217,777		$	8,289,200		$	(71,423	)	-0.9	%

	Year-to-date September 30,
AVERAGE BALANCES		2005			2004			$ Change		% Change
Securities AFS-taxable	$	1,341,598		$	1,907,062		$	(565,464	)	-29.7	%
Securities AFS-nontaxable		63,372			70,564			(7,192	)	-10.2	%
Securities HTM-taxable		182,939			75,614			107,325		141.9	%
Securities HTM-nontaxable		91,420			88,348			3,072		3.5	%
Total securities		1,679,329			2,141,588			(462,259	)	-21.6	%
Loans		5,692,465			5,246,443		��	446,022		8.5	%
Fed funds sold and rev repos		32,435			24,005			8,430		35.1	%
Total earning assets		7,404,229			7,412,036			(7,807	)	-0.1	%
Allowance for loan losses		(65,754	)		(74,270	)		8,516		-11.5	%
Cash and due from banks		334,988			336,210			(1,222	)	-0.4	%
Other assets		530,551			480,195			50,356		10.5	%
Total assets	$	8,204,014		$	8,154,171		$	49,843		0.6	%
Interest-bearing demand deposits	$	1,177,438		$	1,315,618		$	(138,180	)	-10.5	%
Savings deposits		1,191,768			977,168			214,600		22.0	%
Time deposits less than $100,000		1,314,264			1,287,047			27,217		2.1	%
Time deposits of $100,000 or more		604,615			456,705			147,910		32.4	%
Total interest-bearing deposits		4,288,085			4,036,538			251,547		6.2	%
Fed funds purchased and repos		690,482			917,772			(227,290	)	-24.8	%
Short-term borrowings		938,206			717,288			220,918		30.8	%
Long-term FHLB advances		177,074			433,342			(256,268	)	-59.1	%
Total interest-bearing liabilities		6,093,847			6,104,940			(11,093	)	-0.2	%
Noninterest-bearing deposits		1,274,571			1,267,936			6,635		0.5	%
Other liabilities		82,766			63,134			19,632		31.1	%
Shareholders' equity		752,830			718,161			34,669		4.8	%
Total liabilities and equity	$	8,204,014		$	8,154,171		$	49,843		0.6	%

	September 30,
PERIOD END BALANCES		2005			2004		$ Change			% Change
Securities available for sale	$	1,143,524		$	1,916,093		$	(772,569	)		-40.3	%
Securities held to maturity		296,962			147,214			149,748			101.7	%
Total securities		1,440,486			2,063,307			(622,821	)		-30.2	%
Loans held for sale		127,209			104,389			22,820			21.9	%
Loans		5,873,257			5,283,953			589,304			11.2	%
Fed funds sold and rev repos		15,685			16,290			(605	)		-3.7	%
Total earning assets		7,456,637			7,467,939			(11,302	)		-0.2	%
Allowance for loan losses		(75,750	)		(74,179	)		(1,571	)		2.1	%
Cash and due from banks		398,027			273,385			124,642			45.6	%
Mortgage servicing rights		57,345			51,199			6,146			12.0	%
Goodwill		137,268			110,271			26,997			24.5	%
Identifiable intangible assets		29,637			21,173			8,464			40.0	%
Other assets		325,716			300,839			24,877			8.3	%
Total assets	$	8,328,880		$	8,150,627		$	178,253			2.2	%
Noninterest-bearing deposits	$	1,358,192		$	1,242,612		$	115,580			9.3	%
Interest-bearing deposits		4,487,250			4,044,919			442,331			10.9	%
Total deposits		5,845,442			5,287,531			557,911			10.6	%
Fed funds purchased and repos		519,173			854,486			(335,313	)		-39.2	%
Short-term borrowings		926,595			855,214			71,381			8.3	%
Long-term FHLB advances		205,789			355,926			(150,137	)		-42.2	%
Other liabilities		99,327			63,236			36,091			57.1	%
Total liabilities		7,596,326			7,416,393			179,933			2.4	%
Common stock		11,655			12,048			(393	)		-3.3	%
Surplus		69,362			121,282			(51,920	)		-42.8	%
Retained earnings		661,764			603,316			58,448			9.7	%
Accum other comprehensive
loss, net of tax		(10,227	)		(2,412	)		(7,815	)		n/m
Total shareholders' equity		732,554			734,234			(1,680	)		-0.2	%
Total liabilities and equity	$	8,328,880		$	8,150,627		$	178,253			2.2	%
Total interest-bearing liabilities	$	6,138,807		$	6,110,545		$	28,262			0.5	%

PERIOD END BALANCES		9/30/2005			12/31/2004		$ Change			% Change
Securities available for sale	$	1,143,524		$	1,580,270		$	(436,746	)		-27.6	%
Securities held to maturity		296,962			136,797			160,165			117.1	%
Total securities		1,440,486			1,717,067			(276,581	)		-16.1	%
Loans held for sale		127,209			101,222			25,987			25.7	%
Loans		5,873,257			5,330,055			543,202			10.2	%
Fed funds sold and rev repos		15,685			86,191			(70,506	)		-81.8	%
Total earning assets		7,456,637			7,234,535			222,102			3.1	%
Allowance for loan losses		(75,750	)		(64,757	)		(10,993	)		17.0	%
Cash and due from banks		398,027			343,125			54,902			16.0	%
Mortgage servicing rights		57,345			52,463			4,882			9.3	%
Goodwill		137,268			137,225			43			0.0	%
Identifiable intangible assets		29,637			32,004			(2,367	)		-7.4	%
Other assets		325,716			318,362			7,354			2.3	%
Total assets	$	8,328,880		$	8,052,957		$	275,923			3.4	%
Noninterest-bearing deposits	$	1,358,192		$	1,354,749		$	3,443			0.3	%
Interest-bearing deposits		4,487,250			4,095,344			391,906			9.6	%
Total deposits		5,845,442			5,450,093			395,349			7.3	%
Fed funds purchased and repos		519,173			617,546			(98,373	)		-15.9	%
Short-term borrowings		926,595			980,318			(53,723	)		-5.5	%
Long-term FHLB advances		205,789			180,894			24,895			13.8	%
Other liabilities		99,327			73,710			25,617			34.8	%
Total liabilities		7,596,326			7,302,561			293,765			4.0	%
Common stock		11,655			12,055			(400	)		-3.3	%
Surplus		69,362			121,705			(52,343	)		-43.0	%
Retained earnings		661,764			620,588			41,176			6.6	%
Accum other comprehensive		-
loss, net of tax		(10,227	)		(3,952	)		(6,275	)		n/m
Total shareholders' equity		732,554			750,396			(17,842	)		-2.4	%
Total liabilities and equity	$	8,328,880		$	8,052,957		$	275,923			3.4	%
Total interest-bearing liabilities	$	6,138,807		$	5,874,102		$	264,705			4.5	%
n/m - not meaningful

	Quarter Ended September 30,
INCOME STATEMENTS		2005		2004			$ Change		% Change
Interest and fees on loans-FTE	$	92,589	$	75,695		$	16,894		22.3	%
Interest on securities-taxable		13,358		16,162			(2,804	)	-17.3	%
Interest on securities-tax exempt-FTE		2,846		2,961			(115	)	-3.9	%
Interest on fed funds sold and rev repos		287		120			167		139.2	%
Other interest income		15		16			(1	)	-6.3	%
Total interest income-FTE		109,095		94,954			14,141		14.9	%
Interest on deposits		21,415		13,547			7,868		58.1	%
Interest on fed funds pch and repos		5,050		3,243			1,807		55.7	%
Other interest expense		11,591		6,179			5,412		87.6	%
Total interest expense		38,056		22,969			15,087		65.7	%
Net interest income-FTE		71,039		71,985			(946	)	-1.3	%
Provision for loan losses		12,127		1,161			10,966		944.5	%
Net interest income after provision-FTE		58,912		70,824			(11,912	)	-16.8	%
Service charges on deposit accounts		13,025		15,010			(1,985	)	-13.2	%
Insurance commissions		9,294		5,197			4,097		78.8	%
Wealth management		5,293		5,080			213		4.2	%
Retail banking - other		5,226		4,678			548		11.7	%
Mortgage banking		3,290		(931	)		4,221		-453.4	%
Other, net		8,028		2,230			5,798		260.0	%
Nonint inc-excl sec (losses) gains		44,156		31,264			12,892		41.2	%
Security (losses) gains		45		6			39		n/m
Total noninterest income		44,201		31,270			12,931		41.4	%
Salaries and employee benefits		37,808		33,217			4,591		13.8	%
Services and fees		8,269		9,190			(921	)	-10.0	%
Net occupancy-premises		3,956		4,043			(87	)	-2.2	%
Equipment expense		3,653		3,799			(146	)	-3.8	%
Other expense		7,293		6,968			325		4.7	%
Total noninterest expense		60,979		57,217			3,762		6.6	%
Income before income taxes		42,134		44,877			(2,743	)	-6.1	%
Tax equivalent adjustment		2,052		2,062			(10	)	-0.5	%
Income taxes		13,861		14,728			(867	)	-5.9	%
Net income	$	26,221	$	28,087		$	(1,866	)	-6.6	%
Earnings per share
Basic	$	0.46	$	0.49		$	(0.03	)	-6.1	%
Diluted	$	0.46	$	0.48		$	(0.02	)	-4.2	%
Weighted average shares outstanding
Basic		56,406,072		57,809,762					-2.4	%
Diluted		56,543,248		58,114,320					-2.7	%
Period end shares outstanding		55,935,184		57,822,833					-3.3	%
Dividends per share	$	0.2000	$	0.1900					5.3	%

	Year-to-date September 30,
INCOME STATEMENTS		2005			2004		$ Change		% Change
Interest and fees on loans-FTE	$	257,274		$	221,045	$	36,229		16.4	%
Interest on securities-taxable		43,085			47,183		(4,098	)	-8.7	%
Interest on securities-tax exempt-FTE		8,626			9,058		(432	)	-4.8	%
Interest on fed funds sold and rev repos		703			226		477		211.1	%
Other interest income		57			37		20		54.1	%
Total interest income-FTE		309,745			277,549		32,196		11.6	%
Interest on deposits		56,109			40,259		15,850		39.4	%
Interest on fed funds pch and repos		13,693			7,503		6,190		82.5	%
Other interest expense		28,501			15,663		12,838		82.0	%
Total interest expense		98,303			63,425		34,878		55.0	%
Net interest income-FTE		211,442			214,124		(2,682	)	-1.3	%
Provision for loan losses		16,352			3,916		12,436		317.6	%
Net interest income after provision-FTE		195,090			210,208		(15,118	)	-7.2	%
Service charges on deposit accounts		38,950			42,295		(3,345	)	-7.9	%
Insurance commissions		25,526			12,728		12,798		100.5	%
Wealth management		15,950			15,054		896		6.0	%
Retail banking - other		15,262			13,495		1,767		13.1	%
Mortgage banking		3,895			6,267		(2,372	)	-37.8	%
Other, net		13,125			6,271		6,854		109.3	%
Nonint inc-excl sec (losses) gains		112,708			96,110		16,598		17.3	%
Security (losses) gains		(4,009	)		21		(4,030	)	n/m
Total noninterest income		108,699			96,131		12,568		13.1	%
Salaries and employee benefits		112,412			97,300		15,112		15.5	%
Services and fees		25,331			26,415		(1,084	)	-4.1	%
Net occupancy-premises		11,308			10,773		535		5.0	%
Equipment expense		11,461			11,122		339		3.0	%
Other expense		21,870			20,332		1,538		7.6	%
Total noninterest expense		182,382			165,942		16,440		9.9	%
Income before income taxes		121,407			140,397		(18,990	)	-13.5	%
Tax equivalent adjustment		6,137			6,294		(157	)	-2.5	%
Income taxes		40,062			46,242		(6,180	)	-13.4	%
Net income	$	75,208		$	87,861	$	(12,653	)	-14.4	%
Earnings per share
Basic	$	1.32		$	1.51	$	(0.19	)	-12.6	%
Diluted	$	1.32		$	1.51	$	(0.19	)	-12.6	%
Weighted average shares outstanding
Basic		56,874,476			58,043,557				-2.0	%
Diluted		57,011,428			58,333,521				-2.3	%
Period end shares outstanding		55,935,184			57,822,833				-3.3	%
Dividends per share	$	0.6000		$	0.5700				5.3	%
n/m - not meaningful

	September 30,
NONPERFORMING ASSETS		2005			2004			$ Change		% Change
Nonaccrual loans	$	27,153		$	27,062		$	91		0.3	%
Restructured loans		-			-			-
Total nonperforming loans		27,153			27,062			91		0.3	%
Other real estate		2,649			4,844			(2,195	)	-45.3	%
Total nonperforming assets		29,802			31,906			(2,104	)	-6.6	%
Loans past due over 90 days		10,089			7,553			2,536		33.6	%
Total nonperforming assets plus past
due over 90 days	$	39,891		$	39,459		$	432		1.1	%
	Quarter Ended September 30,
ALLOWANCE FOR LOAN LOSSES		2005			2004			$ Change		% Change
Beginning Balance	$	65,902		$	74,179		$	(8,277	)	-11.2	%
Charge-offs		(4,538	)		(3,295	)		(1,243	)	37.7	%
Recoveries		2,259			2,134			125		5.9	%
Provision for loan losses		12,127			1,161			10,966		944.5	%
Ending Balance	$	75,750		$	74,179		$	1,571		2.1	%
RATIOS
ROA		1.27	%		1.35	%
ROE		13.81	%		15.26	%
Equity generation rate		7.81	%		9.34	%
EOP equity/ EOP assets		8.80	%		9.01	%
Average equity/average assets		9.17	%		8.84	%
Interest margin - Yield - FTE		5.82	%		5.01	%
Interest margin - Cost - FTE		2.03	%		1.22	%
Net interest margin - FTE		3.79	%		3.80	%
Rate on interest-bearing liabilities		2.47	%		1.47	%
Efficiency ratio		55.89	%		53.71	%
Net charge offs/average loans		0.15	%		0.09	%
Provision for loan losses/average loans		0.81	%		0.09	%
Nonperforming loans/total loans		0.46	%		0.51	%
Nonperforming assets/total loans		0.51	%		0.60	%
Nonperforming assets/total loans+ORE		0.51	%		0.60	%
ALL/nonperforming loans		278.97	%		274.11	%
ALL/total loans		1.29	%		1.40	%
Net loans/total assets		69.61	%		63.92	%
COMMON STOCK PERFORMANCE
Market value of stock-Close	$	27.850		$	31.080
Market value of stock-High	$	30.800		$	32.360
Market value of stock-Low	$	26.630		$	27.920
Book value of stock	$	13.10		$	12.70
Tangible book value of stock	$	10.11		$	10.42
Tangible equity	$	565,649		$	602,790
Market/Book value of stock		212.60	%		244.72	%

	Year-to-date September 30,
ALLOWANCE FOR LOAN LOSSES		2005			2004			$ Change		% Change
Beginning Balance	$	64,757		$	74,276		$	(9,519	)	-12.8	%
Charge-offs		(12,163	)		(10,950	)		(1,213	)	11.1	%
Recoveries		6,804			6,937			(133	)	-1.9	%
Provision for loan losses		16,352			3,916			12,436		317.6	%
Ending Balance	$	75,750		$	74,179		$	1,571		2.1	%
RATIOS
ROA		1.23	%		1.44	%
ROE		13.36	%		16.34	%
Equity generation rate		7.29	%		10.17	%
EOP equity/ EOP assets		8.80	%		9.01	%
Average equity/average assets		9.18	%		8.81	%
Interest margin - Yield - FTE		5.59	%		5.00	%
Interest margin - Cost - FTE		1.78	%		1.14	%
Net interest margin - FTE		3.82	%		3.86	%
Rate on interest-bearing liabilities		2.16	%		1.39	%
Efficiency ratio		57.17	%		53.91	%
Net charge offs/average loans		0.13	%		0.10	%
Provision for loan losses/average loans		0.38	%		0.10	%
Nonperforming loans/total loans		0.46	%		0.51	%
Nonperforming assets/total loans		0.51	%		0.60	%
Nonperforming assets/total loans+ORE		0.51	%		0.60	%
ALL/nonperforming loans		278.97	%		274.11	%
ALL/total loans		1.29	%		1.40	%
Net loans/total assets		69.61	%		63.92	%
COMMON STOCK PERFORMANCE
Market value of stock-Close	$	27.850		$	31.080
Market value of stock-High	$	31.150		$	32.360
Market value of stock-Low	$	26.630		$	25.890
Book value of stock	$	13.10		$	12.70
Tangible book value of stock	$	10.11		$	10.42
Tangible equity	$	565,649		$	602,790
Market/Book value of stock		212.60	%		244.72	%
OTHER DATA
EOP Employees - FTE		2,601			2,444
n/m - not meaningful

	Quarter Ended
AVERAGE BALANCES		9/30/2005			6/30/2005			$ Change		% Change
Securities AFS-taxable	$	1,133,718		$	1,390,756		$	(257,038	)	-18.5	%
Securities AFS-nontaxable		60,075			63,520			(3,445	)	-5.4	%
Securities HTM-taxable		208,221			209,566			(1,345	)	-0.6	%
Securities HTM-nontaxable		94,811			93,658			1,153		1.2	%
Total securities		1,496,825			1,757,500			(260,675	)	-14.8	%
Loans		5,914,589			5,669,110			245,479		4.3	%
Fed funds sold and rev repos		31,152			18,308			12,844		70.2	%
Total earning assets		7,442,566			7,444,918			(2,352	)	0.0	%
Allowance for loan losses		(66,120	)		(66,243	)		123		-0.2	%
Cash and due from banks		313,434			343,117			(29,683	)	-8.7	%
Other assets		527,897			532,805			(4,908	)	-0.9	%
Total assets	$	8,217,777		$	8,254,597		$	(36,820	)	-0.4	%
Interest-bearing demand deposits	$	829,106		$	1,251,831		$	(422,725	)	-33.8	%
Savings deposits		1,488,974			1,124,568			364,406		32.4	%
Time deposits less than $100,000		1,323,998			1,312,717			11,281		0.9	%
Time deposits of $100,000 or more		674,440			588,732			85,708		14.6	%
Total interest-bearing deposits		4,316,518			4,277,848			38,670		0.9	%
Fed funds purchased and repos		637,923			745,858			(107,935	)	-14.5	%
Short-term borrowings		959,605			961,431			(1,826	)	-0.2	%
Long-term FHLB advances		205,812			177,278			28,534		16.1	%
Total interest-bearing liabilities		6,119,858			6,162,415			(42,557	)	-0.7	%
Noninterest-bearing deposits		1,245,573			1,261,788			(16,215	)	-1.3	%
Other liabilities		99,102			78,121			20,981		26.9	%
Shareholders' equity		753,244			752,273			971		0.1	%
Total liabilities and equity	$	8,217,777		$	8,254,597		$	(36,820	)	-0.4	%

PERIOD END BALANCES		9/30/2005			6/30/2005		$ Change			% Change
Securities available for sale	$	1,143,524		$	1,212,669		$	(69,145	)		-5.7	%
Securities held to maturity		296,962			304,589			(7,627	)		-2.5	%
Total securities		1,440,486			1,517,258			(76,772	)		-5.1	%
Loans held for sale		127,209			144,665			(17,456	)		-12.1	%
Loans		5,873,257			5,645,812			227,445			4.0	%
Fed funds sold and rev repos		15,685			24,025			(8,340	)		-34.7	%
Total earning assets		7,456,637			7,331,760			124,877			1.7	%
Allowance for loan losses		(75,750	)		(65,902	)		(9,848	)		14.9	%
Cash and due from banks		398,027			300,585			97,442			32.4	%
Mortgage servicing rights		57,345			51,561			5,784			11.2	%
Goodwill		137,268			137,412			(144	)		-0.1	%
Identifiable intangible assets		29,637			30,425			(788	)		-2.6	%
Other assets		325,716			318,558			7,158			2.2	%
Total assets	$	8,328,880		$	8,104,399		$	224,481			2.8	%
Noninterest-bearing deposits	$	1,358,192		$	1,249,464		$	108,728			8.7	%
Interest-bearing deposits		4,487,250			4,271,260			215,990			5.1	%
Total deposits		5,845,442			5,520,724			324,718			5.9	%
Fed funds purchased and repos		519,173			726,846			(207,673	)		-28.6	%
Short-term borrowings		926,595			827,347			99,248			12.0	%
Long-term FHLB advances		205,789			205,827			(38	)		0.0	%
Other liabilities		99,327			79,017			20,310			25.7	%
Total liabilities		7,596,326			7,359,761			236,565			3.2	%
Common stock		11,655			11,824			(169	)		-1.4	%
Surplus		69,362			91,619			(22,257	)		-24.3	%
Retained earnings		661,764			646,782			14,982			2.3	%
Accum other comprehensive
loss, net of tax		(10,227	)		(5,587	)		(4,640	)		n/m
Total shareholders' equity		732,554			744,638			(12,084	)		-1.6	%
Total liabilities and equity	$	8,328,880		$	8,104,399		$	224,481			2.8	%
Total interest-bearing liabilities	$	6,138,807		$	6,031,280		$	107,527			1.8	%
n/m - not meaningful

	Quarter Ended
INCOME STATEMENTS		9/30/2005		6/30/2005			$ Change		% Change
Interest and fees on loans-FTE	$	92,589	$	85,641		$	6,948		8.1	%
Interest on securities-taxable		13,358		13,993			(635	)	-4.5	%
Interest on securities-tax exempt-FTE		2,846		2,917			(71	)	-2.4	%
Interest on fed funds sold and rev repos		287		143			144		100.7	%
Other interest income		15		22			(7	)	-31.8	%
Total interest income-FTE		109,095		102,716			6,379		6.2	%
Interest on deposits		21,415		18,326			3,089		16.9	%
Interest on fed funds pch and repos		5,050		4,995			55		1.1	%
Other interest expense		11,591		9,413			2,178		23.1	%
Total interest expense		38,056		32,734			5,322		16.3	%
Net interest income-FTE		71,039		69,982			1,057		1.5	%
Provision for loan losses		12,127		1,429			10,698		748.6	%
Net interest income after provision-FTE		58,912		68,553			(9,641	)	-14.1	%
Service charges on deposit accounts		13,025		13,541			(516	)	-3.8	%
Insurance commissions		9,294		8,370			924		11.0	%
Wealth management		5,293		5,414			(121	)	-2.2	%
Retail banking - other		5,226		5,284			(58	)	-1.1	%
Mortgage banking		3,290		(3,246	)		6,536		-201.4	%
Other, net		8,028		2,644			5,384		203.6	%
Nonint inc-excl sec (losses) gains		44,156		32,007			12,149		38.0	%
Security (losses) gains		45		(4,057	)		4,102		n/m
Total noninterest income		44,201		27,950			16,251		58.1	%
Salaries and employee benefits		37,808		37,245			563		1.5	%
Services and fees		8,269		8,104			165		2.0	%
Net occupancy-premises		3,956		3,661			295		8.1	%
Equipment expense		3,653		3,855			(202	)	-5.2	%
Other expense		7,293		7,396			(103	)	-1.4	%
Total noninterest expense		60,979		60,261			718		1.2	%
Income before income taxes		42,134		36,242			5,892		16.3	%
Tax equivalent adjustment		2,052		2,073			(21	)	-1.0	%
Income taxes		13,861		11,963			1,898		15.9	%
Net income	$	26,221	$	22,206		$	4,015		18.1	%
Earnings per share
Basic	$	0.46	$	0.39		$	0.07		17.9	%
Diluted	$	0.46	$	0.39		$	0.07		17.9	%
Weighted average shares outstanding
Basic		56,406,072		56,828,841					-0.7	%
Diluted		56,543,248		56,967,995					-0.7	%
Period end shares outstanding		55,935,184		56,751,801					-1.4	%
Dividends per share	$	0.2000	$	0.2000					0.0	%
n/m - not meaningful

NONPERFORMING ASSETS		9/30/2005			6/30/2005			$ Change		% Change
Nonaccrual loans	$	27,153		$	32,684		$	(5,531	)	-16.9	%
Restructured loans		-			-			-
Total nonperforming loans		27,153			32,684			(5,531	)	-16.9	%
Other real estate		2,649			3,634			(985	)	-27.1	%
Total nonperforming assets		29,802			36,318			(6,516	)	-17.9	%
Loans past due over 90 days		10,089			8,310			1,779		21.4	%
Total nonperforming assets plus past
due over 90 days	$	39,891		$	44,628		$	(4,737	)	-10.6	%
	Quarter Ended
ALLOWANCE FOR LOAN LOSSES		9/30/2005			6/30/2005
Beginning Balance	$	65,902		$	66,787		$	(885	)	-1.3	%
Charge-offs		(4,538	)		(4,443	)		(95	)	2.1	%
Recoveries		2,259			2,129			130		6.1	%
Provision for loan losses		12,127			1,429			10,698		748.6	%
Ending Balance	$	75,750		$	65,902		$	9,848		14.9	%
RATIOS
ROA		1.27	%		1.08	%
ROE		13.81	%		11.84	%
Equity generation rate		7.81	%		5.77	%
EOP equity/ EOP assets		8.80	%		9.19	%
Average equity/average assets		9.17	%		9.11	%
Interest margin - Yield - FTE		5.82	%		5.53	%
Interest margin - Cost - FTE		2.03	%		1.76	%
Net interest margin - FTE		3.79	%		3.77	%
Rate on interest-bearing liabilities		2.47	%		2.13	%
Efficiency ratio		55.89	%		56.97	%
Net charge offs/average loans		0.15	%		0.16	%
Provision for loan losses/average loans		0.81	%		0.10	%
Nonperforming loans/total loans		0.46	%		0.58	%
Nonperforming assets/total loans		0.51	%		0.64	%
Nonperforming assets/total loans+ORE		0.51	%		0.64	%
ALL/nonperforming loans		278.97	%		201.63	%
ALL/total loans		1.29	%		1.17	%
Net loans/total assets		69.61	%		68.85	%
COMMON STOCK PERFORMANCE
Market value of stock-Close	$	27.850		$	29.250
Market value of stock-High	$	30.800		$	29.670
Market value of stock-Low	$	26.630		$	26.710
Book value of stock	$	13.10		$	13.12
Tangible book value of stock	$	10.11		$	10.16
Tangible equity	$	565,649		$	576,801
Market/Book value of stock		212.60	%		222.94	%
OTHER DATA
EOP Employees - FTE		2,601			2,616
n/m - not meaningful

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2005

($ in thousands)

(unaudited)

Note 1 - Financial Performance Non-GAAP - Quarter and Year-to-Date ended September 30, 2005

Management is presenting in the following table adjustments to net income as reported in accordance with generally accepted accounting principles for significant items resulting from Hurricane Katrina and the sale of its merchant services portfolio. Management believes this information will help users compare Trustmark’s current results to prior periods.

Financial Performance
Net Income Adjusted for Specific Items (Non-GAAP)
	Quarter Ended 9/30/2005						Year-to-Date 9/30/2005
		$			Basic EPS			$			Basic EPS
Net Income as reported - GAAP	$	26,221		$	0.465		$	75,208		$	1.322
Adjustments (net of taxes):
Add charges related to Hurricane Katrina
Provision for loan losses		6,054			0.107			6,054			0.106
Mortgage related charges		1,419			0.025			1,419			0.025
Non-interest income - lost revenues		839			0.015			839			0.015
Non-interest expenses - additional expenses		333			0.006			333			0.006
		8,645			0.153			8,645			0.152
Subtract sale of Merchant Service Portfolio		(3,551	)		(0.063	)		(3,551	)		(0.062	)
Net Income adjusted for specific items (Non-GAAP)	$	31,315		$	0.555		$	80,302		$	1.412

Hurricane Katrina

On August 29, 2005, Hurricane Katrina struck the Mississippi Gulf Coast, central and eastern Mississippi causing significant damages. Immediately following the storm, Trustmark initiated a process to assess the storm’s impact on its customers and on Trustmark’s consolidated financial statements. In accordance with Statement of Financial Accounting Standards (SFAS) No. 5, “Accounting for Contingencies," Trustmark has determined, through reasonable estimates, that specific losses were probable and have been reflected in the consolidated financial statements as of September 30, 2005.

Trustmark identified customers impacted by the storm in an effort to estimate the loss of collateral value and customer payment abilities. As a result of customer surveys, collateral inspections and review of risk characteristics, Trustmark has increased its allowance for loan losses through provision for loan losses by $9.8 million on a pre-tax basis. Specifically, $3.5 million and $1.5 million have been allocated for losses due to collateral impairment on 1-4 residential mortgages and consumer loans, respectively. General reserves of $4.8 million for consumer and commercial loans have been allocated for losses due to economic disruption caused by the storm. Within the heavily damaged Gulf Coast area and the immediate surrounding areas, Trustmark has residential mortgage, consumer and commercial loan customers with aggregate balances of $62.5 million, $30.5 million and $47.8 million, respectively.

Trustmark’s mortgage division was additionally impacted by $2.3 million pre-tax resulting from adjusted fair values on loans held for sale, increased prepayment speeds on mortgage servicing rights and waived ancillary fees in the impacted areas. In addition, Trustmark experienced lost revenues of $1.4 million pre-tax resulting from customer assistance in retail account fees and incurred additional expenses of $539 thousand. Management’s estimates, assumptions and judgments are based on information available as of the date of the consolidated financial statements; accordingly, as this information changes, actual results could differ from those estimates.

Sale of Merchant Services

Trustmark evaluated its strategic alternatives in payment processing systems and selected NOVA Information systems as its provider of card processing services for its commercial merchant services customers. In connection with this alliance, Trustmark sold its existing payment processing portfolio in the third quarter for a pre-tax gain of $5.75 million, which is included in other noninterest income.

Note 2 - Loans and Allowance for Loan Losses

For the periods presented, loans consisted of the following:

	9/30/05		6/30/05		9/30/04
Real estate loans:
Construction and land development	$	653,003	$	606,339	$	496,937
Secured by 1-4 family residential properties		2,059,045		1,973,807		1,808,966
Secured by nonfarm, nonresidential properties		981,793		943,037		885,813
Other		143,477		147,658		142,028
Loans to finance agricultural production		48,008		36,183		41,789
Commercial and industrial		863,815		866,493		859,156
Consumer		873,742		807,852		793,447
Obligations of states and political subdivisions		189,902		186,099		179,821
Other loans		60,472		78,344		75,996
Loans		5,873,257		5,645,812		5,283,953
Less Allowance for loan losses		75,750		65,902		74,179
Net Loans	$	5,797,507	$	5,579,910	$	5,209,774

The allowance for loans losses is maintained at a level believed adequate by management, based on estimated probable losses within the existing loan portfolio. Trustmark’s allowance for possible loan loss methodology is based on guidance provided in SEC Staff Accounting Bulletin No. 102, “Selected Loan Loss Allowance Methodology and Documentation Issues,” as well as other regulatory guidance. Accordingly, Trustmark’s methodology is based on historical loss experience by type of loan and internal risk ratings, homogeneous risk pools, and specific loss allocations, with adjustments considering current economic events and conditions. The provision for loan losses reflects loan quality trends, including the levels of and trends related to nonaccrual loans, past due loans, potential problem loans, criticized loans and net charge-offs or recoveries and other factors. During the fourth quarter of 2004, Trustmark recorded a release of $9.4 million to the allowance for loan losses resulting from changes in estimates to specific factors for pooled loans and a specific class of commercial loans, both of which experienced positive trends.

Note 3 - Mortgage Banking

For the periods presented, the carrying amount of mortgage servicing rights are as follows:

	9/30/05			6/30/05			9/30/04
Mortgage Servicing Rights	$	61,751		$	59,694		$	58,990
Valuation Allowance		(4,406	)		(8,133	)		(7,791	)
Mortgage Servicing Rights, net	$	57,345		$	51,561		$	51,199

Mortgage servicing rights are rights to service mortgage loans for others, whether the loans were acquired through purchase or loan origination. Purchased mortgage servicing rights are capitalized at cost. For loans originated and sold where the servicing rights are retained, Trustmark allocated the cost of the loan and the servicing right based on their relative fair values. Mortgage servicing rights are amortized over the estimated period of the related net servicing income. At September 30, 2005, Trustmark serviced $3.6 billion in mortgage loans for others.

Impairment for mortgage servicing rights occurs when the estimated fair value falls below the underlying carrying value. Fair value is determined utilizing specific risk characteristics of the mortgage loan, current interest rates and current prepayment speeds. As a direct result of Hurricane Katrina, the recovery of mortgage servicing rights reflected in the table below were reduced by $785 thousand for estimated prepayments on mortgages serviced in the affected areas. During 2004, Trustmark reclassified $7.1 million of mortgage servicing right impairment from temporary to other-than-temporary which reduced the valuation allowance for impairment and the gross mortgage servicing rights balance with no effect to the net mortgage servicing rights assets. Impairment is considered to be other-than-temporary when Trustmark determines that the carrying value is expected to exceed the fair value for an extended period of time.

The following table illustrates the components of mortgage banking included in noninterest income in the accompanying income statements:

	Quarter Ended									Year-to-date
		9/30/05			6/30/05			9/30/04			9/30/05			9/30/04
Mortgage servicing income	$	4,188		$	4,217		$	4,167		$	12,600		$	12,612
Mortgage guaranty fees		(1,118	)		(1,129	)		(1,081	)		(3,346	)		(3,302	)
Mortgage servicing, net		3,070			3,088			3,086			9,254			9,310
Amortization of mortgage
servicing rights		(2,750	)		(2,620	)		(2,675	)		(7,990	)		(9,076	)
Recovery/(Impairment) of mortgage
servicing rights		3,727			(4,821	)		(3,111	)		1,638			1,516
(Loss) gain on sale of loans		(64	)		374			1,579			644			3,926
Other, net		(693	)		733			190			349			591
Mortgage banking	$	3,290		$	(3,246	)	$	(931	)	$	3,895		$	6,267

Note 4 - Earning Assets and Interest-Bearing Liabilities

The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:

	Quarter Ended									Year-to-date
	9/30/05			6/30/05			9/30/04			9/30/05			9/30/04
Securities - Taxable		3.95	%		3.51	%		3.27	%		3.78	%		3.18	%
Securities - Nontaxable		7.29	%		7.44	%		7.51	%		7.45	%		7.61	%
Securities - Total		4.29	%		3.86	%		3.58	%		4.12	%		3.51	%
Loans		6.21	%		6.06	%		5.59	%		6.04	%		5.63	%
FF Sold & Rev Repo		3.66	%		3.13	%		1.56	%		2.90	%		1.26	%
Total Earning Assets		5.82	%		5.53	%		5.01	%		5.59	%		5.00	%
Interest-bearing Deposits		1.97	%		1.72	%		1.35	%		1.75	%		1.33	%
FF Pch & Repo		3.14	%		2.69	%		1.33	%		2.65	%		1.09	%
Borrowings		3.95	%		3.32	%		1.98	%		3.42	%		1.82	%
Total Interest-bearing Liabilities		2.47	%		2.13	%		1.47	%		2.16	%		1.39	%
Net interest margin		3.79	%		3.77	%		3.80	%		3.82	%		3.86	%

During the third quarter of 2005, Trustmark moved $4.5 million in book value of held to maturity (HTM) securities to available for sale (AFS) as allowed by paragraph 8 of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” These securities were general obligation municipal bonds issued by seven different entities along the Mississippi Gulf Coast that incurred serious damage by Hurricane Katrina. These entities are facing severe fiscal and economic strain which resulted in a material deterioration in their financial stability, at least in the short-term. Transferring these securities to AFS will provide a more transparent impact of the current value of the bonds in Trustmark’s consolidated financial statements and give management more flexibility in managing the exposure to these entities as additional information emerges on their creditworthiness.

Note 5 - Business Combinations

On December 1, 2004, Trustmark acquired Fisher-Brown, Incorporated, located in Pensacola, Florida. This business combination was accounted for under the purchase method of accounting and includes the results of operations for Fisher-Brown from the transaction date. Excess cost over tangible net assets acquired totaled $36.2 million, of which $9.3 million and $26.9 million have been allocated to identifiable intangibles and goodwill, respectively.

On March 12, 2004, Trustmark acquired five branches of Allied Houston Bank in a business combination accounted for by the purchase method of accounting. In connection with the transaction, Trustmark acquired approximately $148.1 million in assets and assumed $161.7 million in deposits and other liabilities for a $10 million deposit premium. Assets consisted of $145.9 million in loans, $585 thousand in premises and equipment and $1.6 million in other assets. The assets and liabilities have been recorded at fair value based on market conditions and risk characteristics at the acquisition date. Loans were recorded at a $6.4 million discount, consisting of a discount for general credit risk of $7.3 million offset by a market valuation premium of $862 thousand. Included in the credit risk discount of $7.3 million was a specific amount for nonaccrual loans of $1.7 million. Subsequent to the purchase date, the unpaid principal for these nonaccrual loans were written down to their net realizable value against the recorded discount. Excess cost over tangible net assets acquired totaled $15.7 million, of which $426 thousand and $15.3 million have been allocated to identifiable intangibles (core deposits) and goodwill, respectively. Trustmark’s financial statements included the results of operations for this acquisition from the merger date.

Note 6 - Basis of Presentation

Certain reclassifications have been made to prior period amounts to conform with current period presentation.